Consumer confidence shows a slight increase but remains low this December.
- The GfK index rises by one point to -17 amidst cautious sentiment.
- Personal finance forecasts improve but still reflect cautious optimism.
- The general economic outlook stays unchanged, indicating sustained public scepticism.
- Black Friday sales achieved notable growth, offering some economic respite.
Consumer confidence experienced a marginal uplift this December, increasing by just one point according to the GfK index, now resting at -17. This figure highlights continuing public apprehension towards the UK’s economic climate, despite minor improvements.
Regarding personal finances, there has been a shift towards positivity, with forecasts for the next year showing an increase to a range of one to three points higher than the previous year. Specifically, the personal financial situation index rose by two points over the past year, reaching -7. Additionally, the forecast for personal finances over the next 12 months has improved, now standing at +1.
Despite these modest gains in personal finance optimism, perceptions of the general economic situation have remained stagnant at -39, reflecting ongoing public scepticism. Similarly, the consumer sentiment index is projected to remain unchanged at -26, marking a persistent cautious outlook among consumers.
The major purchase index, which indicates confidence in buying big-ticket items, remains unchanged at -16. Contrarily, the savings index has seen a slight decline, dropping three points to +21, signifying reduced confidence in saving money amidst current economic conditions.
GfK’s Consumer Insights Director, Neil Bellamy, remarked on the year’s economic fluctuations, pointing out that 2024’s variations were notably narrower compared to previous years. The UK General Election was identified as a significant factor affecting confidence, with initial optimism post-election succumbing to economic concerns by September.
Retailers experienced a significant boost from Black Friday sales, with technology, durables, and seasonal products seeing an overall volume increase of 7.7% compared to the previous year. This contributed to a turnover of £992 million during the Black Friday week, indicating a 110% improvement over the average week in 2024.
However, Chris Wootton, CFO of Frasers Group, highlighted a weakening consumer sentiment linked to budgetary announcements, citing ‘spooked’ consumers as a result of governmental economic messaging. The group’s retail operations observed an 8.4% decline in half-year sales, prompting a reduction in profit expectations by £25 million.
The current economic sentiment reflects a cautious consumer outlook, necessitating further improvements in economic perceptions for confidence to be restored.
